In 1657 a rumour went reverberating around London. A new elixir had arrived from the east: a leaf that, when drunk, had seemingly magical qualities. It made the body “clean and lusty”; it vanquished illness and invigorated drowsy minds. The leaf was available from Garway’s Coffee House in Change Alley at 16 to 50 shillings per pound. It was called “by the Chinese Tcha, and by other nations Tay, alias Tee.”

So began our love affair with tea, a drink that has remained at the heart of British life for three and a half centuries, from Victorian afternoon teas to Lyons Tea Rooms. But a recent report suggests that now the industry is contracting. According to Mintel, tea sales in the UK have dropped by 6% from £699m in 2010 to an estimated £654m in 2015.

But according to Mintel all of these losses were accounted for by a slackening demand for traditional black teas. Conversely alternative teas are going “from strength to strength”, with sales of herbal, green and speciality teas all sharply up.

Bill Gorman, the executive chairman of the UK Tea and Infusions Association, says: “If you went back to the average kitchen cupboard 20 years ago you would find one box of tea. If you go to that same cupboard today you’ll find six or seven different boxes in there – infusions or fruit teas. The industry’s innovation over the last few years has been quite striking.”

Gorman is bullish about the tea industry’s future and excited by the new experimental culture that has appeared in recent years. This is typified by London tea bar Amanzi, which sells a huge range of speciality teas from its stores in Marylebone and Soho. Owner David Elghanayan, an entrepreneur with roots in the drinks industry, says tea bars offer something different in a capital city dominated by coffee culture.

Most tea is drunk at home. Photograph: Alamy

“I was born in London but my family are Middle Eastern, so tea has always been a part of both my cultures,” Elghanayan explains. About seven or eight years ago I was in the US. I was at my cousin’s house and I tried some incredible teas. They had started a company called Amanzi, which means water in the Shona dialect [of Zimbabwe].” Their idea had been to create a tea bar. “You could get 80 or 90 different blends. You could get them hot or iced or you could get them to take home.”

Excited by the concept, Elghanayan invested in Amanzi and increased his share of the business over the years. After two years as a stakeholder he decided to take over the whole business. “In the US it was undercapitalised so I closed it down and brought the idea to Britain and opened my first store in Marylebone,” he says. Now Elghanayan operates a second store at 52 Brewer Street in Soho, selling the Amanzi proprietary blends: roasted almond, cinnamon spice, mulled wine, white floral mint tea. “I created a blend called Mummy and Me for when my wife was pregnant.”

Elghanayan hopes these will entice Britain’s tea drinkers. And, as Gorman points out, a vast potential market is out there. “The British population has not changed their consumption of fluids since the second world war,” Gorman says. “We drink eight units of fluids a day, and three of those are tea. In 2010 70% of Britons drank a cup every day, by 2014 that has risen to 80%. In comparison only 40% of the British population drink coffee on a daily basis.”

The challenge for tea bars like Amanzi, Gorman points out, is that “86% of all tea is drunk at home” – drinkers are not as trusting with a cup of tea in a café as they are with a cup of coffee. But it is an alluring challenge. “If you look at how well Starbucks do when they are serving 40% of the adult population, how well could a tea shop do?” says Gorman.

Bethan Thomas, a tea buyer at Whittard, has been in the industry for a decade and has watched the shift from “traditional tea bags to speciality teas”. She says: “I think in Britain we are very proud of our tea but a bit behind the times. People will say ‘Oh yes! I like Earl Grey’. But people are realising that there is more to tea than milk and sugar.”

Tea warehouses of the East and West India Dock Company, London – a wood engraving from 1874. Photograph: Universal Images Group/Getty Images

Thomas’s job at Whittard has involved repositioning a traditional brand for this new market. One of her favourite creative challenges is inventing blends “with a real story”. “A lot of the teas we have created come from wacky notions,” she says. “We research the market, but we also see if we could make something more interesting. Chocolate is quite a trend. Red velvet cake has been very popular over the last few years and I wanted to make something that tastes like that.”

As well as Red Velvet, Whittard’s revamped range includes Cucumber Mint Tea – “the closest thing to a G&T in a tea blend” – Coconut Truffle White Tea and Goji Acai, “which appeals to health buffs”. It’s part of a movement that is making tea “young and sexy”, Thomas says. “It’s not something that your gran drank with her tea cosy anymore. Now it can be a whole experience: fun and exciting.”

But this is only one part of tea’s new appeal, Thomas explains. Equally important for the 21st-century drinker is a reconnection with ancient culture. Just as coffee drinkers have invested in sophisticated equipment, become curious about the origin of the beans and the method of grinding and serving, so tea drinkers are getting interested in the rich Eastern culture and artisan craft.

James Thirlwall is one of those exploring this side of an emerging market. Thirlwall’s tea education began while living in Japan and continued afterwards as he trained as a Chinese medicine practitioner. “I became interested in tea as a medicine,” he says, “the ritual side of tea. That was the idea behind my business.”

Back in Oxford, Thirlwall founded the Chayou Tea House. He had a clear aim: “To inspire and educate people around the world about the joys of tea and tea culture.” He organises tastings, masterclasses, ceremonies and seminars about tea and topics like health or mindfulness. The first event took place in September last year and Thirlwall is enthusiastic about the response. “It has been great,” he says. “People have never sat down and thought about tea in this way. Some of those I have spoken to in the industry say that it is attracting the same sort of people who are interested in coffee and wine. But there is something about tea. It’s quite intoxicating.”

One of Chayou Tea House’s most popular events is the tea gathering. It mimics the ancient ceremonies of China or Japan. A tea maker sits at the head of a table, guiding a group through a selection of teas.Thimble-sized cups are warmed, people smell the leaves, then rounds of tea are poured out. “You would make tea anywhere from three to 12 times from the same pot,” he explains. “The tea maker is quite like a good waiter. They answer questions about the tea, but they make sure that everyone is having a nice time.”

“People love the experience”, says Thirlwall. It’s a good way for people to get together when they’re not drinking [alcohol] or eating. It has a different type of atmosphere and we get a range of different people coming along. There are foodies, people who are interested in healthy living or spiritual practices.”

Thirlwall is optimistic about what is quietly being talked about as the new tea revolution. In London, David Elghanayan has the same feeling. He has ambitious plans for Amanzi. In the next year he aims to open two more stores. “It’s all about improving the model, then we’ll be ready to do a full roll-out programme,” he says, “and we’re looking at international franchising too.”